It’s tough being grouchy all the time.
Like most Americans, I haven’t found much to smile about lately.
As a commentator, it is much easier to break bad news than it is to write about the positives. You know the old journalistic maxim, “if it bleeds – it leads.”
Consequently, recent developments have confounded my creative juices. Nobody wants to read about an improving stock market or a strengthening dollar. Where’s the fun in that?
A case in point is last Friday’s job’s report.
Reports Are Encouraging but Mixed
During March, job growth in the United States was at its highest in nearly three years. Although the unemployment rate remains mostly unchanged at 9.7 percent, according to Friday’s Labor Dept. report, 162,000 new positions were added to U.S. payrolls. The government also revised the January and February job figures up by a combined 62,000, putting the employment gains at 224,000 as the first quarter of the year came to a close.
While most economists had expected a boost from temporary government hiring for the taking of the decennial census, these jobs amounted only to 48,000 or about 21 percent of total new employment.
Analysts also had forecast a significant pent-up job demand resulting from inclement weather through the first two months of the year. The surprise, however, was the number of new private as opposed to public sector jobs added by the economy.
The stock market closed for the weekend above 10,900, reflecting the cautious optimism that is slowly finding it way into the economy. Consumers and investors may not be ebullient, but their expenditures have started to creep higher.
Progress Will Be Ponderous
Companies like Caterpillar Inc. are among those adding staff, indicating that the recovery that began in the second half of 2009 is starting to foster the job gains needed to lift consumer spending and sustain the economic expansion. Despite this palpable shift, there is universal agreement that unemployment will be slow to recede as formerly discouraged employees try to re-enter the labor force. On the positive side, this means that the Federal Reserve probably will keep a lid on interest rates, which already are at historic lows.
Even with positive employment figures, the economy is not all daffodils and sunshine.
March showed a steep increase in personal bankruptcies. More Americans filed for bankruptcy protection since the federal government tightened its regulations in October 2005.
Last month, the federal courts reported over 158,000 bankruptcy filings or 6,900 a day, a rise of 35 percent from February. Filings were up 19 percent over March 2009. The previous high over the past five years was last October when there were 133,000 filings.
Historically, most analysts expect to see a spike in bankruptcy filings in the year following the end of a recession. With so many homeowners still under water on their mortgages and continued high unemployment, Chapter 7 filings (liquidation bankruptcies) will likely track the still increasing number of foreclosures.
Through Chapter 13 reorganization, consumers can repay a portion of their debts so that they can keep their homes. In addition to being a more costly and complex option, most debtors are selecting Chapter 7 because they simply don’t believe their homes are worth saving.
Despite the upswing in personal defaults, it is difficult not to recognize the slow thaw in what has been a seemingly interminable economic winter. Still, I would be circumspect about putting all of my economic eggs into one basket.
John Cohn is a senior partner in the Globe West Financial Group based in West Los Angeles. He may be contacted at www.globewestfinancial.com
